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Facebook signals shift with hire from PayPal

By Vindu Goel

New York Times

POSTED:
LAST UPDATED: 07:20 p.m. HST, Jun 09, 2014


SAN FRANCISCO » It couldn't be any plainer if it were in a post by Mark Zuckerberg himself: Facebook, which was built on the idea that people want to share information with dozens of friends and acquaintances, is getting serious about more private communications.

On Monday, the social network announced that it had hired David Marcus, the president of eBay's PayPal division and a former entrepreneur to lead the expansion of its messaging products — and eventually, to figure out how to make money from them.

A few hours earlier, Facebook signaled one area of messaging that it was exploring when it accidentally published the iPhone version of a new app called Slingshot that is aimed at competing against Snapchat, the popular service that allows people to send each other disappearing messages and photos.

The latest developments come on top of Facebook's pending acquisition of WhatsApp, the most popular stand-alone mobile messaging service, for as much as $19 billion, as well as its recent decision to split its Messenger service from the main Facebook smartphone app to speed up innovation in messaging.

"Messaging is a core part of Facebook's service and key to achieving our mission of making the world more open and connected," Facebook said in its announcement about Marcus' new role.

In his three years at PayPal, Marcus helped turn the payment service into a business that processed $180 billion in transactions last year and accounted for 41 percent of eBay's revenue.

In a message he posted on Facebook and LinkedIn, Marcus said that he had missed being an entrepreneur leading a small team of people. He joined PayPal when it acquired his mobile payments startup, Zong, and eventually he oversaw 14,000 people.

"I realized that my role was becoming a real management one, vs. my passion of building products that hopefully matter to a lot of people," he wrote. "At first, I didn't know whether another big company gig was a good thing for me, but Mark's enthusiasm, and the unparalleled reach and consumer engagement of the Facebook platform ultimately won me over."

Brian Blau, who follows social media for the research firm Gartner, said that messaging was becoming a "pillar product" for Facebook.

"I've said for a long time that e-commerce will be a key ingredient in social networking," Blau wrote in an email. "Given David's background with PayPal, we can certainly make the connection that he will lead Facebook messaging into a place that enables commerce for big and small businesses."

Facebook said that Marcus would report to Zuckerberg, who is Facebook's chief executive, and to Javier Olivan, the company's vice president for growth and analytics, who had been overseeing messaging. He will have no involvement with the company's payment products or with WhatsApp, which will operate independently when the acquisition closes later this year.

The Slingshot leak appears to have been entirely coincidental. Facebook intended to release the app in the next week or two, but accidentally put it online early in some countries. The company quickly pulled the app from the Apple app store, but not before the blog TechCrunch and others published screenshots.

With Slingshot, users can shoot a photo or video, annotate it and send it to other people. Unlike Snapchat, the recipients can't see the image until they send one of their own back to the original sender. And once swiped, the messages disappear.

Marcus' departure, which is effective at the end of June, came as a shock to eBay, where he was widely respected.

"David reinvigorated product design to deliver compelling consumer experiences and energized the team to make a great business better," John Donahoe, eBay's chief executive, wrote in a blog post announcing the move. "An entrepreneur at heart, David has made a career decision to focus on what he loves most — leading smaller teams to create great product experiences."

Donahoe, who will lead PayPal until a new president is named, said that PayPal had strong leadership and products.






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